Kansai Nerolac Paints (500165) Q4 15/16 earnings summary

Executive summary

• FY16 sales and operating revenue rose 9.3% YoY; normalized PBT increased 32.7%, while reported profit included a large gain from the Chennai land sale.

• Growth initiatives included new decorative brand Soldier, automotive and industrial product launches, and planned capacity and R&D investments.

Financial highlights

• Sales and operating revenue was ₹4,604.36 crore versus ₹4,211.64 crore; net sales/income from operations was ₹3,830.22 crore versus ₹3,549.06 crore.

• Normal PBT before exceptional items was ₹529.37 crore versus ₹398.90 crore; PBT including the exceptional gain was ₹1,064.71 crore.

• PAT was ₹891.10 crore versus ₹271.67 crore; the ₹535.34 crore land-sale gain was recorded as an exceptional item.

• Recommended dividend was ₹3.05/share, including a special dividend of ₹1.25/share, versus ₹1.40/share last year.

Outlook and guidance

• FY17 economic growth was expected to be similar to FY16; a 7.5% growth outlook, positive monsoon forecast and anticipated reforms were cited as demand tailwinds.

• Planned Saykha, Gujarat facility: 42,000 MT annual capacity at estimated cost ₹350 crore; Goindwal Sahib, Punjab project: 38,000 MT at estimated cost ₹180 crore.

• A Global R&D Centre at Vashi, Navi Mumbai was planned at an estimated cost of ₹40 crore.